Revenue Dept looks to close group-tax loophole
Looking to close a major tax loophole, the Revenue Department plans to impose a 20 per cent tax rate on groups established for the purposes of avoiding full tax payment.
The department has urged Finance Minister Kittiratt Na-Ranong to make a change to the Revenue Code to prevent tax avoidance among groups of high-income people, Revenue Department director-general Satit Rungkasiri said on Friday.
Professionals, including physicians, engineers, TV anchors, politicians and high-income self-employed people often form groups in order to avoid progressive rate taxes, Satit said.
These people often have many sources of income. If they combined their incomes and filed an annual tax payment they would be subject to progressive rates ranging from 10 to 37 per cent of their income. By reporting their income in groups, however, they qualify for tax deductions under the current tax law, Satit said.
He said he had discussed the issue with Kittiratt, who is also deputy prime minister.
The amendment to the tax law would lead to the imposition of a 20-per-cent tax rate on income reported by a group of persons, Satit said, preventing them from avoiding full annual tax payments.
He said if a group of people do business, it would be subject to corporate income tax of 20 per cent of their profits.
Non-profit organisations currently pay a 10-per-cent rate on their taxable income.
The department also currently allows spouses to file separate tax statements. The new practice would lower the tax burden on families, he said.
